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“Show me the money,” Cuba Gooding Jr. famously tells Tom Cruise in Jerry Maguire. Wall Street has been pressuring Hollywood to do the same, as investors push for streaming profits amid economic headwinds. Key parts of the solution for industry players, from Disney to Amazon Studios, have been cost cuts. But while entertainment companies have been showing the door to thousands of staffers, they have also shown their top executives the money — again.
In a case of bad timing, disclosures of higher (or lower, but still very healthy) CEO compensation in regulatory filings in March and April have made for a sharp contrast with layoffs and the start of the writers strike. This executive pay reporting season didn’t repeat last year’s picture of several bosses joining the very exclusive nine-figure club, starring Endeavor’s Ari Emanuel ($308.2 million) and Warner Bros. Discovery CEO David Zaslav ($246.6 million). But several top execs in Hollywood saw their 2022 paydays increase, many driven by large stock awards.
And media sector pay has long been considered high compared to other industries, which means CEOs and boards might now face more public scrutiny. “Overall, we’re seeing CEO compensation continue its post-COVID climb,” says Amit Batish, senior director of content at corporate leadership data firm Equilar, about the broader corporate trend stateside.
However, compensation packages for a majority of the media and entertainment executives analyzed by The Hollywood Reporter exceeded the 2022 median pay of $22.3 million, up 7.7 percent from 2021, among the companies tracked by the Equilar 100, which compiles compensation disclosures made by March 31 by the largest players in Corporate America by revenue across various sectors.
“Stock awards make up the majority of compensation packages, and these awards are typically granted at the beginning of the year — there was much less economic uncertainty to kick off 2022,” says Batish. “Therefore, the negative economic impacts, such as cost-cutting and employee layoffs, are not necessarily reflected in the value of those stock awards.”
Netflix’s Reed Hastings, who in January exited his co-CEO role to focus on his executive chairman title, led the Hollywood pack with a 2022 compensation package worth $51.1 million, up 25 percent. Meanwhile, the biggest pay gainer on THR’s list below is Paramount Global CEO Bob Bakish, with a 60 percent bump. Comcast’s Michael Cavanagh, who in October was elevated from CFO to the added role of president and recently took on oversight of entertainment arm NBCUniversal when its CEO, Jeff Shell, was fired for an “inappropriate relationship,” saw a 48 percent pay rise.
But critics were not appeased by the fact that Shell and Bob Chapek, the former Disney executive who was replaced by Bob Iger at the end of the company’s previous fiscal year, earned less in 2022 than in 2021. “Last year, 8 Hollywood CEOs made nearly $800 million, yet pay for TV writers has fallen by 23 percent over the last 10 years,” Sen. Bernie Sanders wrote in a May 2 tweet.
The disclosures ahead of a strike pose a PR headache. “The optics of massive layoffs are not good if the CEO and other top brass get raised compensation,” says Wall Street veteran Hal Vogel. Meanwhile, he sees “no surprise” in cases where corporate bosses had to take “pay haircuts” given that “lots of the CEO compensation is tied to stock price performance.”
Many media stocks finished 2022 down sharply, often underperforming the drop in the S&P 500 stock index, which itself recorded its worst year since 2008. “I expect pay at the top will again be reduced over the next year. The boards shouldn’t be afraid to do this,” Vogel says.
With stock awards typically granted at the start of the year, Batish says 2023 pay could fall “as many media companies took a hit to close out 2022 as [streaming] subscriber growth cooled off and the advertising market weakened.”
In an interesting asterisk, the highest-paid executive in the broader entertainment sector was not a CEO but a creative officer. Charlie Collier, who left Fox last year to join Roku as head of media in late October, started off with a 2022 pay package worth a whopping $53.3 million. Time will tell if that bet pays off.
A version of this story appears in the May 10 issue of The Hollywood Reporter magazine. Click here to subscribe.
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